The Fortune 500 Insiders Network is an online community where top executives from the Fortune 500 share ideas and offer leadership advice with Fortune’s global audience. Casey Carl, chief strategy and innovation officer at Target, has answered the question: How do you encourage employees to take risks?
You’ve all heard the stories of the corporate dinosaurs: one-time industry leaders who dominated their respective marketplace, yet failed to innovate, inevitably were disrupted, and eventually became extinct. History is littered with countless examples: Kodak, Blockbuster, and Pan Am, to name a few. As the pace of change accelerates in the world, so too, does this rate of extinction.
Despite the numerous and well-documented examples, it is incredibly hard for successful and established organizations to break the pattern and remain relevant. Innovation is the only path to sustainable growth. But to innovate requires a culture of smart risk-taking, which becomes harder to maintain as successful companies grow risk-averse in protecting their current business. Encouraging employees to take risks requires leadership to fall back in love with a few four-letter words. Don’t worry—HR will be totally cool with it.
In order to truly create an innovative, risk-taking culture as a leader, you must know how your team is motivated. Is it stability, achievement, or future possibility? Each one of these motivators creates a different perception of risk and requires a different environment to be successful. For those motivated by stability, it is essential to create a safe atmosphere for them to try out new behaviors and equip them with guides to help them along the way. Employees motivated by achievement must embrace the opportunity cost of not taking risks (heeding the lessons from the corporate dinosaurs) and learn that innovation has very defined, disciplined best practices that can be tracked and measured. Those motivated by future possibility must have the autonomy they crave coupled with clear guardrails to guide their efforts.
Fail fast, fail small, and fail often. As a leader, it’s critical to create and reinforce a culture where failure is not only accepted, but celebrated, too. Understand the distinction between risk and recklessness. Largely, it’s a matter of scale and the size of the investment. Thomas Edison, Albert Einstein, and Steve Jobs were all great innovators because they understood how critical failure was to their process. Ask yourself, “What knowledge did we gain and how can we apply it going forward?” It could be that the kernel of an idea was great, but it needed a pivot. Failure is a beautiful thing when done the right way.
The greatest determinant to whether smart risk-taking will thrive in your organization is how you show up as a leader. It’s easy to say, “We want our employees to take smart risks” and, “We believe innovation is important to our culture.” But when that first failure happens, how will you handle it? Mixed messages can kill the innovative spirit before it has a chance to blossom. To create the right environment, start by sharing your own failures and lessons learned, and how you as a leader and the business overall is better for it. Then consistently reinforce it with others. People will not only feel safe, empowered, and rewarded, but they’ll be comfortable pursuing ideas with greater disruptive potential.
If you truly fall back in love with these four-letter words, you will encourage greater risk-taking among your employees, your employment brand will benefit, innovation will flourish, and most importantly, your business will grow—the best four-letter word of them all.